CoOwnership

1
Co-Ownership

• Joint Tenancy
• Tenancy In Common

2
Two Types of co-ownership

• Estates and Interests are often held by two or
  more people at the same time generally as Joint
  Proprietors
• Under Victorian Law there are 2 forms of
  co-ownership
• Joint tenancy
• Tenancy in Common
• They have different legal rights accorded to the
  people in the co-ownership

3
Joint Tenancy

• Joint tenancy may be viewed as a single ownership
• The classical legal view of joint tenancy
  involves the simultaneous presence of The Four
  Unities
• Unity of Title
• Unity of Interest
• Unity of Possession
• Unity of Time

4
The 4 Unities

• Unity of Title
• Co-owners must hold their title under the same
  interest, or
• Their interest must have been created through the
  same event
• Eg. A joint tenancy cannot be created if one
  co-owner received and interest by transfer and
  the other received an interest by will
• Unity of Interest
• Co-owners have identical interests in the
  property
• Eg. One co-owner cannot have a fee simple and the
  other a life estate

5
The 4 Unities

• Unity of Possession
• The Co-owners must have identical rights to
  possession of the whole property
• Unity of Time
• The Co-owners interest must arise at the same
  moment
• Eg. If one co-owners interest is subject to a
  contingency and the other is vested, there is no
  unity of time
• Eg. If 2 sisters were to obtain a remainder
  interest in land when they turned 21, there could
  be no unity of time (unless they are twins)

6
The Right of Survivorship

• If one of the 4 Unities is missing then there can
  be no joint tenancy
• The Right of Survivorship is the most important
  characteristic of joint tenancy
• What does this mean? If one of the joint tenants
  dies, the estate or interest in the land
  continues to be held by the surviving joint
  tenants
• What if a joint tenant attempts to leave his or
  her interest to others by will this will not be
  successful it contradicts the right of
  survivorship

7
Right of Survivorship

• Right of Survivorship jus accrescendi (note,
  this is the same as acquisition of title to land
  gained through accretion and alluvion)
• In other words, technically, the common law does
  not see survivorship as the inheritance of the
  deceased joint tenants share because there was
  only ever one share
• Rather, the loss of the deceased joint tenant
  extends the interests of the surviving tenants

8
Right of Survivorship

• What if one joint tenant murdered the other?
• Public policy one should not benefit from crime
• Right of survivorship technically joint tenancy
  is extended
• The view taken in Victoria is although
  technically the surviving tenant becomes the
  legal owner, he or she holds the land on trust
  for the benefit of him/herself (half) and holds
  the dead tenants share on trust for the estate
  of the deceased estate
• If there is a third joint tenant, the victims
  share goes to them rather than to the victims
  estate

9
Married Spouses

• Most common situation for joint tenancy because
• The assets pass automatically to the survivor
  without the complications of an executor
• Transactions with banks are thought to be more
  straightforward (a bit of a myth its not much
  simpler
• In todays society (pre-nups being more popular,
  divorce rates high) perhaps tenancy in common
  would be more appropriate?
• Joint tenancy is created expressly by words such
  sd To A B jointly (or as joint tenants)
• Joint tenancy is created by implication where the
  4 Unities are present

10
Equity in Joint Tenancy

• In Equity, there is the presumption that people
  involved in commercial transactions do not intend
  to acquire property together as joint tenants
• It is thought that no-one would intend their
  business partners to acquire ones accumulated
  assets before ones family
• Even if the proprietors are stated on the title
  as joint tenants, equity will consider that they
  hold the legal estate on trust for themselves as
  tenants in common
• In a business partnership, a right of
  survivorship would be inconsistent with the fact
  that a partnership is a profit making business
• Equity also takes this view where several people
  purchase a property but provide the purchase
  price in unequal amounts

11
Tenancy in Common

• Tenants in Common have identical rights to
  possession of the whole property
• The 3 other of the 4 Unities do not have to be
  present
• Unity of Title does not have to be the same
  event
• Unity of Interest can be a different type of
  estate or interest
• Unity of Possession YES
• Unity of Time does not have to arise at the
  same moment
• Tenants in Common often take under different
  tiles
• Tenants in Common often take in different
  proportions

12
Tenancy in Common

• For example, it is common that one tenant might
  have a 1/3 share and the other have a 2/3 share
• The words on the document creating the
  co-ownership will use words which indicate
  whether it is Tenancy in Common
• Eg. To Albert, Beatrice and Charles in equal
  shares
• Eg. To Kate, Leo and Michael equally
• Eg. To Richard in the proportion of a ¼ share
  and to Sam in the proportion of a ¾ share
• Tenancy in Common has no right of survivorship
• Separate Certificates of Title can be issued and
  these will be dealt with separately
• However, most banks require a mortgage over the
  whole land as a matter of practice

13
Rights of Enjoyment

• All co-owners (whether joint tenants or tenants
  in common) have the same rights to occupy and use
  the whole of the property
• Normally, if only one co-owner lives there, the
  others have a right to collect rent (unless there
  is an agreement stating otherwise)
• One owner who repairs or improves the land does
  not have any right to contribution from the
  others
• A farmer who farms a property is not accountable
  to other co-owners for the profits made
• BUT, if the farmer leases the property and
  collects rent, he, or she may be called to
  account for more than comes to his or her fair
  share and proportion
• Co-owners are liable in an action if they were to
  prevent other co-owners from occupying the land
  or if they destroy all or part of it

14
Termination of Co-ownership

• Co-ownership can be terminated by one of the
  following
• Survivorship and Alienation
• Partition
• Sale

15
Survivorship and Alienation

• Occurs in the case of joint tenancy
• Co-ownership comes to an end if one joint tenant
  survives all the others
• However, the law recognises that joint tenants
  can alienate their interests during their
  lifetime
• This severs joint tenancy consider
• Albert, Beatrice and Charles hold an estate in
  fee simple as joint tenants
• Albert transfers his interest to Zoe, who then
  takes a 1/3 interest as a tenant in common (Zoe
  has no unity of time/title)
• Beatrice and Charles continue as Joint Tenants of
  the remaining 2/3 interest
• If Beatrice Dies, Charles will take the 2/3
  interest by survivorship
• Co-ownership between Charles and Zoe will
  continue as tenancy in common

16
Partition

• A property may be divided amongst the co-owners
  so that they can enjoy individual parts of their
  land
• If the parties cannot agree, one or more of them
  can apply for a compulsory partition under 221 of
  the Property Law Act 1958

17
Sale

• Where the co-ownership is not working
  harmoniously, the common sense approach would be
  to sell the property and divide the proceeds of
  sale
• This is normally done by agreement, but if not
  possible, one of the parties may bring an action
  for partition and in that action seek an order
  for sale in lieu of partition (s222 Property Law
  Act)
• This is common in the context of bankruptcy when
  the other co-owners will not cooperate with the
  Trustee in Bankruptcy in a sale of the property
• In dividing the proceeds, Equity will consider
  things such as contribution, improvements etc.

18
Easements
19
What is an easement

• A right to use another persons land in common
  with them in a defined way
• Eg. A carriageway, drainage, or to supply
  services such as electricity etc.
• An easement is a paramount interest (s42(2)(d)
  Transfer of Land Act) all successive title
  holders are bound by easements over land whether
  they are on the title or not

20
4 Easement Characteristics

• There must be a dominant tenement and a servient
  tenement
• There must be land that is benefited by the
  easement and land which is disadvantaged by the
  easement

21
4 Easement Characteristics

• The easement must accommodate the dominant
  tenement
• That is, make that is make it a better and more
  convenient property
• The easement does not have to abutt the dominant
  tenement

22
4 Easement Characteristics

• The dominant and servient tenements must not be
  owned and occupied by the same person
• This is important in the case where an easement
  has existed and subsequently the person entitled
  to it acquires the servient land
• The easement is then extinguished

23
4 Easement Characteristics

• The easement must be capable of forming the
  subject matter of a grant
• The law does not recognise vague or
  unreasonably extensive easement, particularly
  those that impose a financial burden on the
  servient owner
• The law does not generally recognise an easement
  of a view or an easement of privacy (protection
  can be ensured through other means)
• The area of the servient tenement in relation to
  the easement must be well defined

24
Creating an Easement

• Three ways to create an easement
• By Express Grant
• By Implied Grant
• By Long User

25
By Express Grant

• Like most property transactions, an easement can
  be created by deed
• The deed defines
• Dimensions of the easement
• The extent of right
• The frequency with which it may be exercised
• Identifies the dominant land
• Easement should be registered under s73 of the
  Transfer of Land Act
• If the easement is authorised by a planning
  scheme or permit under the Planning and
  Environment Act or falls under the Subdivision
  Act 1988, further requirements may be necessary
• Most easements are created today as part of a
  plan of subdivision under the Subdivision Act 1988

26
By Implied Grant

• When land has been subdivided, easements may be
  implied
• If part of the land being sold is, to the
  knowledge of the subdivider, intended to be used
  for some purpose which would require an easement
  over other land of subdivider (Re State
  Electricity Commission (Vic) and Joshuas
  Contract)
• If, prior to subdivision, there was an apparent
  and continuous use of the servient land that
  created the impression an easement was enjoyed
  over part of the land the courts may apply the
  maxim that the grantor shall not derogate from
  his grant and imply an easement in favour of the
  purchaser of the land that appeared to have
  benefited from the easement
• However, if the subdivider retained the land
  appearing to benefit, then the courts do not
  apply an easement in favour of the subdivider
  unless the parties must have intended to create
  an easement

27
By Long User

• 20 years
• If the claimant (in right of dominant land) can
  establish continuous use of the apparent easement
  as of right
• Applies to both general and Torrens land
• Use of the land will not be considered as of
  right if
• The owner of the alleged servient land has
  expressly consented to the use, or
• If the use has been secret, so that the servient
  owner would not have been aware of it, or
• If the use has been obtained by force or threats
  against the owner of land in question

28
Extinguishment of Easement

• 2 ways
• Express Release
• Implied Release

29
Express Release

• Dominant tenement executes a deed (or appropriate
  instrument under the Transfer of Land Act) which
  will release the easement
• A informal release, which would not be recognised
  at law, may be effective in quity if the servient
  owner has acted on the faith of it, and where it
  would be unfair to permit the dominant owner to
  treat the easement as remaining in force
• Subdivision Act 1988 has extensive provisions
  for the release of easements

30
Implied Release

• If it can be shown that the dominant tenement
  intended to abandon it, this will amount to an
  implied release
• Eg. If the dominant tenement is altered in a way
  that is inconsistent with the continued use of
  the easement
• The courts have not regarded mere failure to use
  the easement, even over a very long period of
  time, as proving an intention to abandon it
• See also s73 of the Transfer of Land Act

31
Wolfe v Freijahs Holdings

• An example of abandonment of a registered
  easement over Torrens Land
• Arose from application of s73 Transfer of Land
  Act for removal of an abandoned easement from a
  Certificate of Title.
• A lane across Ms Wolfes land connected the rear
  of the land owned by Freijahs to a nearby street
• The carriageway had been noted on the title to
  her land since 1915
• Ms Wolfe claimed to have enjoyed the land
  exclusively, fenced in a way that prevented use
  of the lane for 40-45 years
• No one had sought to use the lane in that time
• She argued that the land had been abandoned
• Freijahs argued that the land with a right of
  easement had been a benefit (just its existance)
  and they had successfully applied for a planning
  permit with rear access as one element of that
  permit, so it could not have been aandoned

32
Wolfe v Freijahs Holdings

• Judge noted that the Certificate of Title is
  conclusive evidence of an estate or interest in
  land
• Therefore, disused easements remain unabandoned
  until they are removed from the title
• When proving abandonment, as would justify its
  removal from title, intention to abandon the
  easement must be proved, and this is not assumed
  merely by disuse
• In this case, transfer of land with the benefit
  of the easement AND initiatives to develop
  (relying on the benefit of the easement) showed
  that there was no intention to abandon the land

33
Question

• Quentin and Rhonda formed a small business
  partnership to make some extra money by buying
  run down terrace houses in Brunswick, renovating
  them and reselling them at a profit. To cut down
  costs, they do their own conveyancing. They have
  encountered the following problems
• When Q inspected 67 Albert Street he noted
  nothing suspicious, and a search of the
  certificate of title revealed an unencumbered fee
  simple estate. He agreed to buy the house as an
  agent for the partners. Six months after the
  transaction was settled and the Transfer of Land
  registered the partners names, a man opened the
  back gate onto the land, drove a truck across the
  back yard, opened another gate on the other side
  of the yard which had not been noticed before,
  and then drove the truck into the rear of the
  house next door. When he returned to close the
  gates he explained that an easement of
  carriageway had been created in favour of his
  neighbouring land by a deed which was not
  registered.
• Under what form of co-ownership would the
  partners obtain title to the land? Must the
  partners take the land subject to the easement in
  favour of the neighbourning land